The money supply multiplier looks at the effect from the perspective of banking and money supply.

The money supply multiplier is a concept in economics that describes the maximum amount of commercial bank money that can be created by a given unit of central bank money. Here's a step-by-step explanation:

1. The central bank of a country injects a certain amount of money into the economy. This is the "base" or "high-powered" money.

2. Commercial banks then take this money and lend it out to businesses, individuals, and other entities. However, they are required by law to keep a certain fraction of the money as reserves. This is known as the reserve ratio.

3. The money that is lent out can then be deposited back into the banking system, and a fraction of it can be lent out again. This process